Global Supply Chain Management Chapter
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Which of the following is NOT a commonly used export document?

  • Certificate of origin
  • Sales receipt (correct)
  • Bill of lading
  • Commercial invoice

    • Free Trade Zones (FTZs) are primarily used to increase customs duties.

    False

    Name one example of a regional trade agreement.

    United States-Mexico-Canada Agreement (USMCA)

    Political restrictions on trade can include tariffs and ____________________.

    <p>embargoes</p> Signup and view all the answers

    Match the following trade agreements with their member countries or regions:

    <p>USMCA = Canada, United States, Mexico EU = 27 member states ASEAN = 10 South East Asian countries Mercosur = Argentina, Brazil, Paraguay, Uruguay</p> Signup and view all the answers

    Which Incoterm stands for 'Cost, Insurance and Freight'?

    <p>CIF</p> Signup and view all the answers

    Absolute accuracy is crucial in domestic documentation more than in international documentation.

    <p>False</p> Signup and view all the answers

    What are macroenvironmental influences?

    <p>Uncontrollable forces and conditions facing an organization, including cultural, demographic, economic, natural, political, and technological factors.</p> Signup and view all the answers

    The limitation on the amount of a product that may be imported from a country is known as an ___________.

    <p>import quota</p> Signup and view all the answers

    What is a common reason for implementing tariffs?

    <p>To protect local businesses</p> Signup and view all the answers

    Which of the following is NOT an international market entry strategy?

    <p>Product Diversification</p> Signup and view all the answers

    Exporting offers the highest risk among international market entry strategies.

    <p>False</p> Signup and view all the answers

    What is the primary advantage of joint ventures in international market entry?

    <p>Significant management input from the domestic firm.</p> Signup and view all the answers

    The procurement of goods and services from foreign sources is known as _____

    <p>importing</p> Signup and view all the answers

    Match the advantage of licensing with its corresponding disadvantage:

    <p>No capital outlay = Licensing agreements cannot be terminated quickly Reduced risk = Licensee can become a future competitor Increased flexibility = Risk of licensee bankruptcy</p> Signup and view all the answers

    What percentage of the world population did the top ten countries represent in 2050?

    <p>53%</p> Signup and view all the answers

    Licensing agreements can easily be terminated.

    <p>False</p> Signup and view all the answers

    What is the main disadvantage of owning a foreign firm?

    <p>Most risky of all international market entry strategies.</p> Signup and view all the answers

    Achieving economies of scale can give a company an advantage in maintaining a _____ position.

    <p>low-cost</p> Signup and view all the answers

    Match the population year with the total population in thousands:

    <p>2000 = 6,086,149 2010 = 6,872,671 2019 = 7,560,290 2050 = 9,488,153</p> Signup and view all the answers

    What is a significant issue organizations may face when importing?

    <p>Government regulations</p> Signup and view all the answers

    Nearshoring refers to locating suppliers far from the domestic company.

    <p>False</p> Signup and view all the answers

    What is an advantage of exporting?

    <p>Greater flexibility.</p> Signup and view all the answers

    Ownership gives a firm the _____ degree of control over its supply chain strategies.

    <p>highest</p> Signup and view all the answers

    Match each market entry strategy with its correct description:

    <p>Exporting = The most common method of international involvement Licensing = Allows use of proprietary assets in another country Joint ventures = Combination of firms to create a new entity Ownership = Financial control through acquisition or expansion</p> Signup and view all the answers

    Why is absolute accuracy crucial in international documentation?

    <p>To avoid additional costs and delays</p> Signup and view all the answers

    What is the main purpose of Free Trade Zones (FTZs)?

    <p>To postpone or reduce customs duties</p> Signup and view all the answers

    Which term of shipment indicates that the seller covers both cost and insurance during transport?

    <p>CIF</p> Signup and view all the answers

    What is an example of a non-tariff barrier in international trade?

    <p>Import quotas</p> Signup and view all the answers

    Which of the following agreements includes Canada, the United States, and Mexico?

    <p>USMCA</p> Signup and view all the answers

    Macroenvironmental influences on organizations include which of the following factors?

    <p>Cultural factors</p> Signup and view all the answers

    How do regional trade agreements benefit supply managers?

    <p>They simplify coordination with major trading partners</p> Signup and view all the answers

    What is a common impact of currency fluctuations on trade?

    <p>Trade-offs between import and export volumes</p> Signup and view all the answers

    What is the function of an inspection certificate in international trade?

    <p>To confirm product compliance with regulations</p> Signup and view all the answers

    Which of the following best describes an embargo?

    <p>A comprehensive trade prohibition with another country</p> Signup and view all the answers

    What is the most common method of international market entry?

    <p>Exporting</p> Signup and view all the answers

    What is a major disadvantage of licensing agreements?

    <p>Cannot be terminated quickly</p> Signup and view all the answers

    Which of the following is an advantage of joint ventures?

    <p>Significant management input from the domestic firm</p> Signup and view all the answers

    What is the primary risk associated with ownership as an international market entry strategy?

    <p>Most risky of all strategies</p> Signup and view all the answers

    What does nearshoring refer to in the context of importing?

    <p>Sourcing from foreign suppliers close to the domestic company</p> Signup and view all the answers

    What advantage does exporting provide for a company?

    <p>Flexibility and less risk</p> Signup and view all the answers

    What is a commonly cited disadvantage of importing?

    <p>Government regulations may complicate processes</p> Signup and view all the answers

    What is a common outcome of achieving economies of scale in international markets?

    <p>Competitive advantage due to lower costs</p> Signup and view all the answers

    What does an agreement in licensing allow a firm to do?

    <p>Use proprietary assets of another company</p> Signup and view all the answers

    What is a limitation of joint ventures?

    <p>Knowledge of the international market is essential</p> Signup and view all the answers

    What can be a significant issue when exporting goods?

    <p>Knowledge of regulations and compliance</p> Signup and view all the answers

    Which of the following best describes the advantage of ownership in market entry?

    <p>Highest degree of control over strategies</p> Signup and view all the answers

    What might be a challenge when a company employs licensing as a strategy?

    <p>Risk of licensee becoming a competitor</p> Signup and view all the answers

    What is one key factor that influences a company’s decision to enter international markets?

    <p>Excess production capacity</p> Signup and view all the answers

    International documentation is simpler than domestic documentation.

    <p>False</p> Signup and view all the answers

    Absolute accuracy in documentation is important to avoid additional costs or delays.

    <p>True</p> Signup and view all the answers

    FTZs are areas that might increase customs duties on imported products.

    <p>False</p> Signup and view all the answers

    The United States–Mexico–Canada Agreement (USMCA) involves three countries.

    <p>True</p> Signup and view all the answers

    Political factors in international trade can include embargoes.

    <p>True</p> Signup and view all the answers

    Currency fluctuations positively impact trade volumes at all times.

    <p>False</p> Signup and view all the answers

    Incoterms are terms of shipment that help clarify responsibilities in international shipping.

    <p>True</p> Signup and view all the answers

    The term 'CIF' stands for 'Cost, Import, and Freight.'

    <p>False</p> Signup and view all the answers

    The macroenvironmental influences include factors such as cultural, economic, and technological aspects.

    <p>True</p> Signup and view all the answers

    Underutilization is common among most Free Trade Zones.

    <p>True</p> Signup and view all the answers

    Exporting is the least common method of international involvement.

    <p>False</p> Signup and view all the answers

    Licensing agreements are easily terminated quickly.

    <p>False</p> Signup and view all the answers

    A joint venture requires the combination of multiple firms to create a new entity.

    <p>True</p> Signup and view all the answers

    Ownership as an international market entry strategy offers the lowest potential reward.

    <p>False</p> Signup and view all the answers

    Nearshoring refers to locating suppliers and vendors far from the domestic company.

    <p>False</p> Signup and view all the answers

    The advantages of exporting include greater flexibility and reduced risk.

    <p>True</p> Signup and view all the answers

    A major disadvantage of licensing is the risk of the licensee becoming a future competitor.

    <p>True</p> Signup and view all the answers

    Greater knowledge of the international market is required in joint ventures when the domestic firm is involved.

    <p>True</p> Signup and view all the answers

    Importing involves the procurement of goods from domestic sources only.

    <p>False</p> Signup and view all the answers

    The domestic firm has complete control over its marketing when using licensing as a market entry strategy.

    <p>False</p> Signup and view all the answers

    Flexibility is higher in ownership as an international market entry strategy.

    <p>False</p> Signup and view all the answers

    Economic barriers are significant issues organizations face when engaging in international importing.

    <p>True</p> Signup and view all the answers

    A major advantage of ownership is its requirement for a high degree of control over supply chain strategies.

    <p>True</p> Signup and view all the answers

    Competitive difficulties are an advantage of exporting.

    <p>False</p> Signup and view all the answers

    Study Notes

    Supply Chain Management

    • Global Supply Chain Management is a chapter topic.
    • Amelia Abernathy is the presenter/author.

    World Economic Forum

    • A link is provided to a particular agenda.

    Top 20 Retailers by Revenue in 2024

    • Walmart has a revenue of $628.6B.
    • Amazon has a revenue of $355.1B.
    • Schwarz has the highest international revenue with $119.9 billion.
    • Ikea has the highest share of international revenue (97%).
    • Tesco has the most locations globally with over 40,000 stores.

    Factors Influencing a Company's Decision to Enter International Markets

    • Market potential
    • Geographic diversification
    • Excess production capacity
    • Advantage of low-cost position due to economies of scale
    • Products near the end of their lifecycle in the domestic market
    • Source of new products and ideas
    • Foreign competition in the domestic market

    Population = Labor

    • 2000 Population: 3,598,744 thousand people (in thousands).
    • 2010 Population: 4,011,898 thousand people (in thousands).
    • 2019 Population: 4,358,102 thousand people (in thousands).
    • 2050 Expected Population: 5,070,409 thousand people (in thousands).
    • Top 10 Countries make up 59% of the world population in 2000.
    • The total world population in 2000 is approximately 6,086,149 thousand people.
    • The total world population in 2020 is approximately 6,872,671 thousand people.
    • The total world population in 2019 is approximately 7,560,290 thousand people.

    International Market Entry Strategies

    • Exporting (most common).
    • Licensing (agreement between firms).
    • Joint Ventures (combination of firms).
    • Ownership (financial control).

    Advantages and Disadvantages of Exporting

    • Advantages:*

    • Greater flexibility

    • Less risk

    • Gain experience

    • Test a market for its viability

    • Product is produced in the domestic market

    • Disadvantages:*

    • Competitive difficulties

    • Currency exchange rates

    • Domestic firm has little control over marketing mix in foreign market

    • Knowledge of regulations required

    • Compliance issues

    US Major Exports

    • Aircraft are a top export in 14 states (28%).
    • Aerospace & Defense exports to Germany, France, Canada, the UK, and Japan alone amounted to $36.1 billion (Aerospace Industries Association).

    Advantages and Disadvantages of Licensing

    • Advantages:*

    • Does not require capital outlays.

    • Risk levels are reduced.

    • Increased flexibility.

    • Good option when foreign markets have high tariff barriers or import quotas.

    • Disadvantages:*

    • Licensing agreements cannot be terminated quickly.

    • Licensee can become a future competitor.

    • Risk of licensee bankruptcy or acquisition by another company.

    Advantages and Disadvantages of Joint Ventures

    • Advantages:*

    • Domestic firm provides significant management input.

    • Good strategy for wholly-owned subsidiaries when foreign gov't prohibits.

    • Disadvantages:*

    • Risks are higher.

    • Flexibility is lower.

    • Greater knowledge of the international market is required.

    Advantages and Disadvantages of Ownership

    • Advantages:*

    • Highest potential reward.

    • High degree of control of supply chain strategies and tactics.

    • Minimizes start-up costs when acquiring existing companies.

    • Company can compete more effectively on price.

    • Disadvantages:*

    • Most risky market entry strategy.

    • Requires greater knowledge of international marketing.

    • Company is fully responsible for all marketing & supply chain activities and processes.

    • Potential for government nationalization of industry.

    Importing and Global Sourcing

    • Procurement of goods/services from foreign sources.
    • Significant government regulations & locating suppliers close to company (nearshoring).

    US Major Imports

    • Petroleum leads as the most valuable import (24%).

    Over 50% of 2023 US trade involved:

    • Mexico
    • Canada
    • China
    • Germany
    • Japan.

    US Imports vs. Exports

    • The US Imported more than exported to 15 of the top 20 trade partners.

    America's Trading Partners

    • Import data.
    • Export data.
    • Trade balance data (US deficit).
    • Data comparison based on 2021 and 2022.

    Documentation

    • International documentation is complex.
    • Absolute accuracy is critical to avoid costs and delays.
    • Useful documents for international trade include certificates of origin, commercial invoices and more.

    Incoterms

    • Standardizes rules of global trade procedures.

    Terms of trade

    • International trade shipping terms.

    Free Trade Zones

    • Areas where companies can postpone or reduce customs duties.
    • Usually located at ports.
    • Levels of development vary.

    Regional Trade Agreements

    • Efforts to reduce barriers, global trade agreements.
    • Implications for supply management in trading countries.

    Examples of Regional Trade Agreements

    • USMCA
    • EU
    • ASEAN
    • Mercosur
    • China's Trade Agreements

    Macroenvironmental Influences

    • Uncontrollable forces like: cultural, demographic, economic, natural, political, and technological factors.

    Political Factors

    • Tariffs (to protect domestic business).
    • Nontariff barriers (restrictions other than tariffs).
    • Import quotas (limiting the amount).
    • Embargoes (prohibiting trade).

    Political Factors (Examples)

    • Brexit (Britain's withdrawal from EU).

    Economic Factors

    • Currency fluctuations (impact on trade).
    • Tradeoff of import/export volumes.
    • Market Size.
    • GDP per capita.
    • Infrastructure (e.g., airport runways).
    • Labor-intensive management (labor costs).

    Culture Factors

    • Language (use of symbols & writing styles).
    • National holidays & observing them.
    • Time orientation (time perception and culture).
    • Business practices.
    • Cultural norms

    A Package Marked for Export

    • Information on the package (handling marks, cautionary marks, consignee's mark, destination etc).

    Bribery and Global Commerce

    • Data on countries and bribery rates.

    Questions?

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    Description

    This quiz focuses on the key concepts in Global Supply Chain Management, presented by Amelia Abernathy. Explore important topics such as factors influencing international market entry and the economic impact of major retailers in 2024.

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